Finance-specific factors as drivers of cross-border investment--An empirical investigation
In this paper we empirically test the role of firm-specific financial characteristics as drivers of international investment and production. We hypothesize that financial strength generates advantages that can be exploited through cross-border investment activity. The hypothesis is tested in a series of binary-response models, using a sample of 1379 European non-financial firms' international acquisitions. Controlling for traditional firm- and target-country-specific foreign direct investment (FDI) determinants, we find strong evidence that financial factors play a significant role in explaining cross-border investment. We conclude that without explicit consideration of the financial dimension, firms' FDI decisions cannot be properly understood.
Year of publication: |
2008
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Authors: | Forssbæck, Jens ; Oxelheim, Lars |
Published in: |
International Business Review. - Elsevier, ISSN 0969-5931. - Vol. 17.2008, 6, p. 630-641
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Publisher: |
Elsevier |
Keywords: | Cost of capital Cross-border acquisitions FDI Financial strategy Financial variables OLI |
Saved in:
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